Carmarthenshire County Council have been ordered to pay a contractor £3.3m following a hearing at the High Court of Justice on September 23rd, which dismissed the council’s argument for postponement of payment.
Alun Griffiths (Contractors) Limited sought summary judgment in the sum of £3,316,487.55 in order to enforce an adjudicator’s decision in its favour against Carmarthenshire County Council. The claim arose out of civil engineering and construction work carried out by Alun Griffiths to the council’s order on the A48 between Swansea and Carmarthen.
Alun Griffiths is a wholly-owned subsidiary of Tarmac Holdings Limited which is itself owned by CRH plc.
Carmarthenshire County Council were also ordered to pay costs after Peter Brogden, who appeared for Alun Griffiths, argued that such costs should be awarded on the indemnity basis in view of the council’s ‘unreasonable and obstructive behaviour’.
Alun Griffiths had provided Tarmac’s guarantee to the council as long ago as 31 March 2023.
In an email sent on 13 April 2023, the council’s solicitors responded that, in view of the guarantee, the council would make payment provided that it received a valid VAT invoice and that it was satisfied that the invoiced sum had been calculated correctly.
Alun Griffiths raised an invoice on the following day.
On 18 April 2023, the council suggested a new payment date of 4 May 2023 and asked that the date of expiry of the guarantee be extended to 31 October 2023. By a further email that day, it indicated that it was seeking “a bit of additional time to make the payment” and again referred to a new deadline of 4 May.
Alun Griffiths’ solicitors explained that it would take some time to obtain board approval for a new guarantee but put that matter in hand. Meanwhile, on 9 May 2023, the council changed tack observing that it had been “reflecting on the inadequacies of the [guarantee].” It particularly identified the expiry date of 30 September which it argued was inadequate time to complete a true-value adjudication. This, it argued, was a particular risk given the possibility of Alun Griffith’s insolvency and the consequential need for applications to the court to allow the council to commence or proceed with its planned adjudication. The letter concluded that the court might well not, in such circumstances, grant summary judgment and that, even if it did, the court would grant a stay of execution.
On 16 June 2023, Alun Griffiths sent a further copy of the guarantee in response to the issues raised by the council in late May. In error, the wrong draft was sent but that was corrected on 26 June 2023. The new guarantee had an expiry date of 31 December 2023.
When the council failed to respond substantively, Alun Griffiths commenced proceedings on 12 July 2023.
The High Court ruled as follows:
“In this case, the council has not defended the enforcement claim and has not resisted the entry of judgment. There are, accordingly, no grounds for ordering it to pay indemnity costs of the claim itself. That said, there was no merit whatever in its application to stay judgment. Further, it was unreasonable to a high degree to promise payment in the event that it was provided with a VAT invoice and correct calculation, only then to raise spurious objections to the guarantee provided.
“Accordingly, I order the council to pay the costs of these proceedings. Such costs will be assessed on the standard basis save that the costs of the council’s application for a stay will be assessed on the indemnity basis.”
We attempted to contact Alun Griffiths for comment.
We contacted Carmarthenshire County Council for comment and asked where the money would come from to cover the judgement. We also asked if all county councillors had been made aware of the judgement. We asked if any member of staff had been dismissed as a result of the judgement.